Answer:
Intrinsic Value = $33.23
Explanation:
The intrinsic value of a stock using the dividend valuation model is the present value of the the future dividend expected from the stock discounted at the required rate of return.
This model is represented as follows
D(1+g)/(r-g) = P
Price, D- dividend payable in now, ke- required rate of return, g- growth rate
D- 3.12 , g-6.50% r-6.25%
Intrinsic value = (3.12× 1.065)/(0.1625-0.065)= $33.228
Intrinsic Value = $33.23
In choosing between the range of alternative investments typically available to U.S. households, which of the following will play a role in influencing their selection of a particular investment type?
a. the expected rate of return, risk and liquidity of each kind of investment.
b. the interest rate and the expected rate of return.
c. the form of dividends, angel investor, future expectations.
Answer:
b. the interest rate and the expected rate of return.
Explanation:
For choosing the type of particular investment it is necessary to check the interest rate and the expected rate of return as every investor wants that there is a less interest rate, less or moderate risk but high rate of return and according to this they made the selection
Therefore the option b is correct
Mountain Lake Corporation's accounting records show the following at year-end December 31, 2014:
Purchase Discounts $7,230 Beginning Inventory $32,660
Freight-In 8,730 Ending Inventory 29,170
Freight-Out 12,260 Purchase Returns and Allowances 4,190
Purchases 164,250
Assuming that Mountain Lake Corporation uses the periodic system, compute the cost of goods purchased and cost of goods sold.
1. Cost of goods purchased$=?
2. Cost of goods sold$=?
Answer:
Cost of goods purchased= $161,560
Cost of goods sold= $165,050
Explanation:
1. Cost of goods purchased (net) = Purchases - Purchase discount - purchase returns and allowances + Freight in
= $164,250 - $7,230 - $4,190 + $8,730
=$161,560
2. Cost of goods sold = Beginning inventory + Net purchase - Ending inventory
= $32,660 + $161,560 - $29,170
= $165,050
During the month, merchandise is sold for $80,500 cash and for $119,000 on account. The cost of merchandise sold is $101,500. What is the amount of revenue? a.$199,500 b.$80,500 c.$119,000 d.$101,500
Answer:
Value of revenue = $98,000
Explanation:
Here, we are interested in calculating the revenue.
Firstly, we add the sales on cash with the sales on account.
Mathematically that would be;
80,500 + 119,000 = $199,500
The value of the revenue = Amount in sales - cost of merchandise = 199,500-101,500 = $98,000
Why Does Marketing Matter?
Answer:
Marketing matters because it educates, builds awareness and establishes initial connections.
Explanation:
We argued that when the economic growth in the US is greater than the (economic) growth rates of our trading partners, the trade deficit in the US should get larger, all else constant.
a. True
b. False
Answer:
The correct answer is the option B: False.
Explanation:
To begin with, given the fact that the economic growth of the United States is greater than the economic growth rates of its trading partners then the trade deficit in the US should get smaller, all else constant due to the fact that the economy is growing at a level that is higher than does of the partners and therefore that when that happens the country will be in a better position and the production of it will increase as expected and that will impact positively in the deficit by reducing it to small amounts.
A stock just paid a dividend of $5.37 and is expected to maintain a constant dividend growth rate of 4.6 percent indefinitely. If the current stock price is $77, what is the required return on the stock
Answer:
The required return on the stock is 11.89%.
Explanation:
To calculate this, the Gordon growth model (GGM) formula is used as follows:
P = d1 / (r – g) ……………………………………… (1)
Where;
P = current share price = $77
d1 = next dividend = Recent dividend * (1 + g) = $5.37 * (1 + 0.046) = $5.61702
r = required return = ?
g = dividend constant growth forever = 4.6%, or 0.046
Substituting the values into equation 1) and solve for r, we have:
77 = 5.61702 / (r - 0.046)
77(r - 0.046) = 5.61702
77r - 3.542 = 5.61702
77r = 5.61702 + 3.542
r = 9.15902 / 77
r = 0.1189, or 11.89%
Therefore, the required return on the stock is 11.89%.
You work for a marketing firm that has just landed a contract with Run-of-the-Mills to help them promote three of their products: guppy gummies, frizzles, and mookies. All of these products have been on the market for some time, but, to entice better sales, Run-of-the-Mills wants to try a new advertisement that will market two of the products that consumers will likely consume together. As a former economics student, you know that complements are typically consumed together while substitutes can take the place of other goods. Run-of-the-Mills provides your marketing firm with the following data: When the price of guppy gummies increases by 5%, the quantity of frizzles sold decreases by 4% and the quantity of mookies sold increases by 5%. Your job is to use the cross-price elasticity between guppy gummies and the other goods to determine which goods your marketing firm should advertise together. Complete the first column of the following table by computing the cross-price elasticity between guppy gummies and frizzles, and then between guppy gummies and mookies. In the second column, determine if guppy gummies are a complement to or a substitute for each of the goods listed. Finally, complete the final column by indicating which good you should recommend marketing with guppy gummies. Relative to Guppy Gummies Recommend Marketing with Guppy Gummies Cross-Price Elasticity of Demand Complement or Substitute Frizzles Mookies
Answer:
Cross Price Elasticity of Demand is a measure of the complimentary or substitutional nature of two goods. It enables one to know if goods go together or are replacements for each other.
When the Cross Price Elasticity is Positive then both of the goods are Substitutes.
This is because when the price of one increased, some people abandoned it and went to the other one which then increased the demand of the latter.
If the Cross Price Elasticity is negative then both the goods are compliments because when the price of one increased, people decided to stop buying it and because the other good is a compliment (goes together) people didn't buy the latter either thereby reducing its demand.
The formula for Cross Price Elasticity is,
= % Change in Quantity Demanded of Good A / % Change in price of Good B
Guppy Gummies and Frizzles.
= -4%/ 5%
= - 0.8%
Cross Price Elasticity is Negative so they are Compliments.
It IS RECOMMENDED to market Frizzles with Guppy Gummies.
Guppy gummies and Mookies
= 5% / 5%
= 1
Cross Price Elasticity is positive so these are Substitutes.
It is therefore NOT recommended to market Mookies with Guppy Gummies.
Trade Mart has recently had lackluster sales. The rate of inventory turnover has? dropped, and the merchandise is gathering dust. At the same time, competition has forced AquariumAquarium's suppliers to lower the prices that Aquarium will pay when it replaces its inventory. It is now December 31, 2016, and the current replacement cost Aquarium's ending inventory is $75,000 below what Aquarium actually paid for the goods, which was $200,000.
Before any adjustments at the end of the? period, the Cost of Goods Sold account has a balance of $$820,000.
Requirements:
a. What accounting action should Aquarium take in this situation?
b. Give any journal entry required.
c. At what amount should Aquarium report Inventory on the balance? sheet?
d. At what amount should the company report Cost of Goods Sold on the income? statement?
e. Discuss the accounting principle or concept that is most relevant to this situation.
Answer:
a. What accounting action should Aquarium take in this situation?
the balance of inventory account should decrease to match the replacement cost.
b. Give any journal entry required.
Dr Cost of goods sold 75,000
Cr Inventory 75,000
c. At what amount should Aquarium report Inventory on the balance? sheet?
Inventory = $200,000 - $75,000 = $125,000
d. At what amount should the company report Cost of Goods Sold on the income statement?
Cost of goods sold = $820,000 + $75,000 = $895,000
e. Discuss the accounting principle or concept that is most relevant to this situation.
US GAAP states that companies must use the lower of cost or market rule, which means that inventory must be recognized at the lowest cost either original purchase cost or market value.
What special asset does Heartland Telecom's acquisition of Surety Wireless identify? The acquisition identifies the asset goodwill . How should Heartland Telecom account for this asset after acquiring Surety Wireless? Explain in detail. Heartland Telecom should measure the ▼ of this asset each year. If this asset has increased in value, Heartland should ▼ . If the value of the asset has decreased, Heartland should
Answer: 1. Goodwill
2. a. Record no entry in the books
b. Record a loss in the books
Explanation:
1. The Special asset created by Heartland Telecom's acquisition of Surety Wireless is Goodwill.
Goodwill is the difference between what the company was worth and what it was purchased for if the purchase price was higher than the worth (market value).
2. a. Goodwill should be accounted for by recoding it in the Long term Assets under Intangible Assets in the balance sheet. It should not be amotrized. If Goodwill increases, there should be no recording this gain on the books.
b. If the value of the asset has decreased, Heartland should record a loss in the books to represent the loss on this account.
Gold standard required countries to A. keep the supply of foreign exchange less than their domestic money supply. B. restrict the demand for foreign goods. C. keep the supply of their domestic money constant. D. keep the supply of their domestic money fixed in proportion to their gold holdings.
Answer:
D.) Keep the supply of there domestic money fixed in proportion to their gold holdings.
Explanation:
The Gold Standard was a monetary system under which countries fixed the value of their money in terms of a specified amount of gold. With the gold standard, countries agreed to convert the paper money into a fixed amount of gold.
Hope this helps you out! : )
You will pay $7,000 now to purchase a perpetuity which will pay you and your heirs $340 at the end of each year, forever. What is the rate of return on this perpetuity?
Answer:
4.86%
Explanation:
Interest rate of a perpetuity = amount / present value
$340 / $7,000 = 0.048571 = 4.86%
I hope my answer helps you
Answer:
4.86%
Explanation:
Interest rate of a perpetuity = amount / present value
$340 / $7,000 = 0.048571 = 4.86%
A corporation issued 5,600 shares of $10 par value common stock in exchange for some land with a market value of $82,000. The entry to record this exchange is:
Answer:
The entry for the exchange is therefore;
Dr Land $82,000
Cr common stock $56,000
Cr Paid in capital in excess of par value common stock $26,000
Explanation:
The land was gotten at a price of $82,000(its fair value)
Common stock issue = 5,600 shares x $10 par value common stock
= $56,000
Paid in capital in excess of par value common stock = $82,000 - $56,000
=$26,000
The entry for the exchange is therefore;
Dr Land $82,000
Cr common stock $56,000
Cr Paid in capital in excess of par value common stock $26,000
On January 1, 2013, an investor purchases 25,000 common shares of an investee at $9 (cash) per share. The shares represent 20% ownership in the investee. The investee shares are not considered "marketable" because they do not trade on an active exchange. On January 1, 2013, the book value of the investee's assets and liabilities equals $600,000 and $150,000, respectively. On that date, the appraised fair values of the investee's identifiable net assets approximated the recorded book values. During the year ended December 31, 2013, the investee company reported net income equal to $22,500 and dividends equal to $12,000.
Noncontrolling investment accounting (price equals book value)
Assume the investor does not exert significant influence over the investee. Determine the balance in the "Investment in Investee" account at December 31, 2013.
Explanation:
Bring ur as over here and ill use my dic
Peterson Furniture Designs is preparing its annual financial statements dated December 31. Ending inventory information about the five major items stocked for regular sale follows: Required: 1-a. Complete the final two columns of the table. Ending Inventory Item Quantity on Hand Total LC&NRV Alligator Armoires Bear Bureaus Cougar Beds Dingo Cribs Elephant Dressers Unit Cost Net When Realizable LC&NRV Acquired Value at per Item (FIFO) Year-End $ 25 $ 22 50 6062 40 40 20 1 6 20 40 450 1-b. Compute the amount that should be reported for the ending inventory using the LC&NRV rule applied to each item. Ending inventory 2. Prepare the journal entry that Peterson Furniture Designs would record on December 31.
Answer:
Peterson Furniture Designs
Ending Inventory
Q Purchase cost NRV Total LC&NRV
Alligator Armoires 60 $25 $22 $1,320
Bear Bureaus 85 $50 $50 $4,250
Cougar Beds 20 $60 $62 $1,200
Dingo Cribs 40 $40 $40 $1,600
Elephant Dressers 450 $20 $16 $7,200
Total $15,570
The value of the ending inventory using lower of cost or net realizable value (LCNRV) is $15,570. The individual LCNRV is underlined for each item.
Since the purchase cost ($17,550) is higher than the ending inventory, the journal entry should be:
December 31, 202x, adjusting value of ending inventory
Dr Cost of goods sold 1,980
Cr merchandise inventory 1,980
Often in business the greater the risk, the __________.
Answer:
greater the potential reward
Explanation:
Initially, Eleanor earns a salary of $200 per year and Darnell earns a salary of $100 per year. Eleanor lends Darnell $50 for one year at an annual interest rate of 16% with the expectation that the rate of inflation will be 5% during the one-year life of the loan. At the end of the year, Darnell makes good on the loan by paying Eleanor $58. Consider how the loan repayment affects Eleanor and Darnell under the following scenarios. Scenario 1: Suppose all prices and salaries rise by 5% (as expected) over the course of the year. In the following table, find Eleanor's and Darnell's new salaries after the 5% increase, and then calculate the $58 payment as a percentage of their new salaries. (Hint: Remember that Eleanor's salary is her income from work and that it does not include the loan payment from Darnell.) Value of Eleanor's new salary after one year The $58 payment as a percentage of Eleanor's new salary Value of Darnell's new salary after one year The $58 payment as a percentage of Darnell's new salary Scenario 2: Consider an unanticipated increase in the rate of inflation. The rise in prices and salaries turns out to be 14% over the course of the year rather than 5%. In the following table, find Eleanor's and Darnell's new salaries after the 14% increase, and then calculate the $58 payment as a percentage of their new salaries. Value of Eleanor's new salary after one year The $58 payment as a percentage of Eleanor's new salary Value of Darnell's new salary after one year The $58 payment as a percentage of Darnell's new salary An unanticipated increase in the rate of inflation benefits______ and harms_____ .
Answer:
Scenario 1: Suppose all prices and salaries rise by 5% (as expected) over the course of the year. In the following table, find Eleanor's and Darnell's new salaries after the 5% increase, and then calculate the $58 payment as a percentage of their new salaries.
Eleanor's new salary = $200 x 1.05 = $210
Darnell's new salary = $100 x 1.05 = $105
the $58 payment represents:
$58 / $210 = 27.62% of Eleanor's new salary
$58 / $105 = 55.24% of Darnell's new salary
Scenario 2: Consider an unanticipated increase in the rate of inflation. The rise in prices and salaries turns out to be 14% over the course of the year rather than 5%. In the following table, find Eleanor's and Darnell's new salaries after the 14% increase, and then calculate the $58 payment as a percentage of their new salaries.
Eleanor's new salary = $200 x 1.14 = $228
Darnell's new salary = $100 x 1.14 = $114
the $58 payment represents:
$58 / $228 = 25.44% of Eleanor's new salary
$58 / $114 = 50.88% of Darnell's new salary
An unanticipated increase in the rate of inflation benefits Darnell and harms Eleanor.
Explain how the Federal Reserve Board can increase or decrease the money supply using each of the following tools: reserve requirements, open-market activities, and discount rates
Answer:
Reserve requirements – Reserve requirement increases to decrease the money supply or vice versa.
Open-market activities – the Fed sell the securities to reduce money supply or purchase it to increase the money supply.
Discount rates – Decrease the discount rate to increase the money supply or vice versa.
Explanation:
The Federal Reserve increases or decreases the money supply by using various tools. So in the case of the reserve requirement, the bank increases the percentage of reserve requirement if the Fed wants to decrease the money supply and to increase the money supply it reduces the reserve requirements. In the case of open market operations, the Fed sells securities and bonds in the market in order to reduce the supply of money or to decrease the supply of money it buys the securities from the market.
In the case of a discount rate, the Fed reduces the discount rate to increase the money supply because reducing the discount rate will induce the banks to give more loans. But to decrease the money supply, the Fed increases the discount rate because an increase in the discount rate reduces the ability of banks to give loans.
addresses unknown parameters in the real world that parallel descriptive measures of very large population? A. The sample mean / B. Statistic Inference C. The central Limit Theorem
Answer:
The answer is "Option B".
Explanation:
Inferential statistics was its process through which data collection is used to conclude the property or even an implicit wave function. Its analysis infers these same features of inhabitants. Its purpose is to use statistical strategies to determine important assumptions regarding sample size, and other choices were wrong which can be defined as follows:
In option A, it defines the average of the given values, that's why it is wrong.In option C, It is used to0 describes a number of samples that's why it is wrong.Assume that you are 30 years old today, and that you are planning on retirement at age 65. You expect your salary to be $42,000 one year from now and you also expect your salary to increase at a rate of 5% per year as long as you work. To save for your retirement, you plan on making annual contributions to a retirement account. Your first contribution will be made on your 31st birthday and will be 8% of this year's salary. Likewise, you expect to deposit 8% of your salary each year until you reach age 65. Assume that the rate of interest is 9%. The present value (PV) (at age 30) of your retirement savings is closest to
Answer:
$50,855.62
Explanation:
I prepared an excel spreadsheet to determine the yearly contributions to the plan and their future value.
once you reach 65 years, your retirement account should have $1,038,165. Now we need to determine the present value = $1,038,165 / (1 + 9%)³⁵ = $50,855.62
Bermuda Cruises issues only common stock and coupon bonds. The firm has a debt–equity ratio of .75. The cost of equity is 11.6 percent and the pretax cost of debt is 6.7 percent. What is the capital structure weight of the firm's equity if the firm's tax rate is 40 percent?
Answer:
the capital structure weight of the firm's equity will be 57.14 %.
Explanation:
Weighted Average Cost of Capital is the return that is required by the providers of long term sources of finance.
A debt–equity ratio of 0.75 means:
Debt : Equity = 0.75 : 1
The Total Ratio will be = 0.75 + 1.00
= 1.75
Therefore, the capital structure weight of the firm's equity will be :
Equity Weight = Equity Ratio ÷ Total Ratio
= 1.00 ÷ 1.75
= 0.5714 or 57.14 %
Examine the equal opportunity laws of another country, not the United States. Are the laws in other countries as much a concern for HRM specialists as they are in the United States?
Answer:
The equal opportunity laws of another country, not the United States is discussed below in details.
Explanation:
An equal opportunity system is a certificate that declares what measures a company takes to eliminate and stop discrimination in the workplace.
The United Kingdom employment equality law is an organization of law that legislates against prejudice-based activities in the workplace.
The prime legislation is the Equality Act 2010, which condemns discrimination in passage to education, government services, private services, and goods, or assumptions in addition to employment.
Sheboygan Co. purchased a new vehicle at a cost of $42,000 on July 1. The vehicle is estimated to have a useful life of 6 years and a salvage value of $3,000. The company uses the straight-line method of depreciation. How much depreciation expense will be recorded for the vehicle during the first year ended December 31?
Answer:
The depreciation at the end of first year = $3250
Explanation:
The cost of a new vehicle on July 1st = $42000
The estimated useful life of vehicle = 6 years
The salvage value of vehicle = $3000
It is given that the company uses the straight-line method for depreciation so we have to calculate the depreciation by subtracting the salvage value from its cost and dividing by years.
Depreciation = ($42000 – $3000) / 6 = $6500
So annual depreciation is $6500.
Therefore depreciation at the end of the first yThe depreciation at the end of first year = $3250ear that is for 6 months = $3250
An estimate of the money and paperwork spent complying with environmental regulations could be compared to the advantages of cleaning up pollution. This method of determining the value of the environment is known as __________.
Answer:
Contingent valuation.
Explanation:
An estimate of the money and paperwork spent complying with environmental regulations could be compared to the advantages of cleaning up pollution. This method of determining the value of the environment is known as contingent valuation.
Contingent valuation can be defined as a survey based method which is typically used to determine the economic value of a non-market resource such as the impact of pollution and preservation of the environment.
This ultimately implies that, contingent valuation is used for the valuation of resources and goods that are not being traded in marketplaces. Therefore, it is mostly related to the environmental and natural resources found around us on planet Earth.
Generally, this environmental and natural resources usually do not have a market price but various individuals derive utility or satisfaction from them.
Hence, the contingent valuation method is aimed at seeking people's opinions by asking questions on how much money they're willing to pay or receive for the preservation of an environmental resource.
For instance, many people derive pleasure from visiting tourist attractions sites such as zoo, recreational facilities, parks etc and would be willing to pay for this natural resources.
An investor buys a 10-year, 7% coupon bond for $1,050, holds it for 1 year, and then sells it for $1,040. What was the investor's rate of return?
Answer:
The answer is 5.71%
Explanation:
Solution
Given that
Coupon rate = 7%
Bond = $1050
Sale of the bond = $1040
n = 10 years, n = 1 year
Now we find the investor's rate of return
Thus
Coupon payment = 7%* 1000
=70
1050 = 70/(1+r) + $1,040/(1+r)
r= 5.71%
Therefore the rate of return of the investor is 5.71%
or
Rate of return = (P1-P0+ Interest ) /P0
= (1040 -1050 + 70 )/1050
= .0571 or 5.71%
On October 10, the stockholders’ equity of Sherman Systems appears as follows. Common stock–$10 par value, 74,000 shares authorized, issued, and outstanding $ 740,000 Paid-in capital in excess of par value, common stock 226,000 Retained earnings 880,000 Total stockholders’ equity $ 1,846,000 1. Prepare journal entries to record the following transactions for Sherman Systems. Purchased 5,200 shares of its own common stock at $27 per share on October 11. Sold 1,050 treasury shares on November 1 for $33 cash per share. Sold all remaining treasury shares on November 25 for $22 cash per share. 2. Prepare the stockholders' equity section after the October 11 treasury stock purchase.
Answer:
1, Journal entries
Date Account and explanation Debi$ Credit$
Treasury stock (5200*27) 140,400
Cash 140,400
(To record purchase treasury stock)
Cash (1,050*33) 34,650
Paid in capital from sale of treasury stock 6,300
Treasury stock (1,050*27) 28,350
(To record sale of treasury stock)
Cash (4,150*22) 91,300
Paid in capital from sale of 6,300
treasury stock
Retained earnings 14,450
Treasury stock (4,150*27) 112,050
(To record sale of treasury stock)
2. Revised equity section
Contributed capital
Common Stock 740,000
Paid in capital in excess of 226,000
par value-Common Stock
Total paid in capital 966,000
Retained earnings 880,000
Total 1,846,000
Less: Treasury stock (140,400)
Total Stockholder's equity $1,705,600
If the factory overhead is underapplied, then the adjusting journal entry to close the factory overhead account includes a: (Check all that apply.)\
Answer:
Debit to cost of goods sold and credit to factory overhead
Explanation:
Here we are interested in knowing the appropriate journal entry when the factory overhead is under applied.
What happens to the factory overhead journal in this case is that the we should have an adjusting journal entry.
The adjusting journal entry here is that we debit cost of goods sold and credit factory overhead
A progressive tax is one which
Answer:
A progressive tax is one which charges more tax for those with higher income.
The amount of tax paid depends on the general income of the person.
When the end-of-period spreadsheet is complete, the adjustment columns should have:_________. a) total debits greater than total credits if a net income was earned b) total debits greater than total credits if a net loss was incurred c) total debits are equal to total credits d) total credits greater than total debits if a net income was earned
Answer:
C. Total debits are equal to total credits
Explanation:
When the end-of-period spreadsheet is complete, the adjustment columns should have:
Total debits equal to total credits.
When this happens, the trial balance is considered to be balanced.
If revenues are greater than expenses, then income statement will give a credit balance. If expenses are bigger than revenues, your income statement will show a debit balance.
The specific identification method (select all that apply): matches each unit of inventory with its actual cost is not an acceptable method of accounting would be beneficial to a company that makes inexpensive products with high sales volume would be beneficial to a company that makes fine jewelry
Answer:
The specific identification methoda) matches each unit of inventory with its actual cost
d) would be beneficial to a company that makes fine jewelry
Explanation:
The specific identification inventory valuation method is one of the inventory valuation method allowed by U.S. GAAP. The other allowed methods are weighted average; and first in, first out (FIFO). The specific identification method identifies every item kept in inventory and its price and tracks it from purchase to resale. Some types of businesses that use the specific identification method are jewelry companies and stores, car dealerships, art galleries, and furniture stores, who can easily identify each item and track the cost and price respectively.
The specific identification method of costing inventories is used when finding out the cost of the ending inventory.
Correct option is A and D.
The specific identification method is "matches each unit of inventory with its actual cost and would be beneficial to a company that makes fine jewelry."
One of the inventory methods permitted by US GAAP is the particular identification inventory valuation method. Weighted average and first in, first out are two alternative strategies that can be used. Every item in inventory, as well as its price, is identified and tracked using this system, from purchase through resale.
Jewelry companies and stores, auto dealerships, art galleries, and furniture stores are just a few examples of enterprises that use the particular identification method to quickly identify each item and track the cost and pricing.
To know more about specific identification method, refer to the link:
https://brainly.com/question/25056275
Assume that the probability of a driver getting into an accident is 3.4%, the
average cost of an accident is $11,116.37, and the overhead cost for an
insurance company per insured driver is $170. What should this driver's
insurance premium be?
The correct answer is $547.96
Why is this the correct answer?Total cost is = (3.4% × $11,116.37) + $ 170The equation is Fixed cost + Variable cost , where the overhead cost becomes the fixed cost.What is variable cost?A variable cost is a corporate expense that changes in proportion to how much a company produces or sells. Variable costs increase or decrease depending on a company's production or sales volume they rise as production increases and fall as production decreases.
To learn more about Insurance policy refer :
https://brainly.com/question/16267577
#SPJ2